More States Move to Legalize Online Gambling

In February, New Jersey became the third state to legalize online gambling. Now, the Garden State moves closer to an official launch of online gaming. The proposed regulations are planned to be enforced on June 3. Once the regulations are published, New Jersey’s Division of Gaming Enforcement will allow a 60-day comment period. Following that, there will be a a review and response period. Once that is completed, online gaming will be allowed.

Prior to New Jersey, Nevada and Delaware had already legalized online gambling. Nevada was the first state to do so back in 2001, but unlike New Jersey only legalized online poker. Delaware did so in June of last year.

Several other states, including California, Massachusetts, Hawaii, Illinois, Iowa and Mississippi, are considering legalizing online gambling. This points to a legislative trend that more states are warming to the idea that allowing Internet gaming is in their best interests.

Cash-strapped states will see a revenue benefit from online gambling. New Jersey, for example, will take 15% of the online winnings, as long as the players are within the state’s borders. Nevada will keep 6.75% of the dollars won.

The Christie administration in New Jersey is also on record as saying that the new internet gambling rules will be expected to have a positive social impact towards public participation in online gaming within the state. Further, the administration says that it’s possible there will be job growth in Atlantic City as a result of the new law.

The trend of states moving to adopt online gaming, with the exception of Nevada, is relatively recent. This is because it was only recently, in late 2011, that the Department of Justice clarified its position about online gambling. Before that, the Justice Department treated all online gambling as illegal activity under the archaic Wire Act, which prevented sports betting over communication wires. The recent clarification of the law transferred online gambling from a federal issue to a state issue, allowing states to make their own laws.

In Illinois, a Senate committee is expected to vote on online gambling by this Friday. Supporters of that bill, sponsored by Senate President John Cullerton, claim that revenues raised from online gaming would would bolster public employee pensions.

In California, a third online gambling bill has been recently introduced. This one, like the Nevada law, would only legalize online poker. Two previous proposals in the Golden State, one by State Sen. Lou Correa, and another by State Sen. Rod Wright, have both been proposed within the past six months.

It is also anticipated that states which legalize online gaming will also look to multi-state initiatives, much like multi-state lotteries, to raise even more money. Tom Goldstein, a lawyer who represented Internet gaming companies in the past, sees a future where cash hungry states join forces in online gaming policies to raise millions of additional dollars in tax revenue.